R 141240Z JAN 09
FM AMEMBASSY BERLIN
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UNCLAS BERLIN 000048 
 
 
STATE FOR INR/R/MR, EUR/PAPD, EUR/PPA, EUR/AGS, INR/EUC, INR/P, 
SECDEF FOR USDP/ISA/DSAA, DIA FOR DC-4A 
 
VIENNA FOR CSBM, CSCE, PAA 
 
"PERISHABLE INFORMATION -- DO NOT SERVICE" 
 
E.0. 12958: N/A 
TAGS: XF IS GZ RS UP US EU
SUBJECT: MEDIA REACTION: MIDEAST, RUSSIA, CLINTON, EU 
 
¶1.   Lead Stories Summary 
¶2.   Israel-Hamas Conflict 
¶3.   Russian-Ukrainian Gas Dispute 
¶4.   Secretary-designate Clinton Hearing 
¶5.   EU Monetary Union 
 
 
¶1.   Lead Stories Summary 
 
Editorials focused on the government's economic stimulus package and 
gas conflict between Ukraine and Russia.  While almost all papers 
opened with reports on the fiscal plan to strengthen the economy, 
two economic papers centered on Deutsche Bank's plan to buy a ten 
percent stake in Deutsche Postbank.  ZDF-TV's early evening newscast 
Heute and ARD-TV's early evening newscast Tagesschau opened with 
stories on the government's economic stimulus package. 
 
¶2.   Israel-Hamas Conflict 
 
S|ddeutsche remarked that Israel "had planned the campaign against 
Hamas for a long time. This included denying foreign journalists 
access to Gaza six weeks ago without giving any reasons for it. 
When the Israeli bombs fell, it was obvious that the attack on Hamas 
was supposed to take place without independent journalists.  To 
avoid own losses of its own troops, Israel is using maximum force, 
which must lead to a disproportionately high number of civilian 
casualties in a densely populated area.  It was clear what the 
reports would look like: they would be devastating." 
 
Frankfurter Allgemeine commented: "Olmert has no future as a 
politician.  Since he had to resign last September due to the 
corruption allegations, he is only Israel's acting-prime minister. 
This might be the reason why he is taking a tougher stance in the 
war against Hamas than Foreign Minister Livni and Defense Minister 
Barak, who both want his office in the next election.  Ruthlessly, 
like somebody who has nothing to lose, Olmert has now also 
embarrassed the U.S. government.   Was he just showing off when he 
said that he called President Bush to tell him while he was 
delivering a speech that the U.S. must not under any circumstances 
vote in favor of the UN resolution for a ceasefire? ....  This would 
mean that Israel decides American Middle East policy.  Even if that 
is the case, Olmert should have kept quiet." 
 
¶3.   Russian-Ukrainian Gas Dispute 
 
Deutschlandfunk commented: "Helplessness is slowly but gradually 
spreading in Brussels.  Both Russia and Ukraine will have to think 
about how long they want to accept the growing loss of confidence by 
the West.  As long as EU monitors have no access to the pumping 
stations, it will be difficult to assign blame for the problems. 
But if Gazprom representatives are now including the United States 
in the blame game and claim that the U.S. government is inciting 
Ukraine to divert gas deliveries, then this would be the first clear 
indication that we have to deal with a proxy war that focuses on 
Ukrainian efforts to align its views with the West, something Moscow 
does not like.  But the government in Kiev must also accept charges 
that it does not make things easier for the EU by permanently 
accusing the Russians as the spoilsports from which it must free 
itself.  On the contrary, Kiev, too, is testing the EU and allows 
growing doubts about whether states with arbitrary - political 
strategies are welcome in the EU.  There are still clear 
deficiencies with respect to energy security for EU citizens.  The 
question is whether the pipelines should not have been filled in the 
other direction, i.e. from West to the East to help the people in 
the Slovak Republic, Romania, Bulgaria and elsewhere.  Would that 
not have been a sign of the energy solidarity that [politicians] 
like to emphasize so often?" 
 
According to Handelsblatt, "neither of the two rivals is willing to 
show his hand.  And this is not really a surprise, because this 
conflict has been smoldering for years.  However, it is surprising 
how quickly Gazprom and Naftogas have forfeited their reputation. 
Not even during the Cold War did we have a similar crisis.  The EU's 
naove approach to this new hot gas war is also surprising.  The 
Europeans wanted to resolve this problem with accountants and 
monitors, but this is a problem that is highly political.  The EU 
needs a clear strategy or it will turn into the plaything of Russian 
power interests or Ukrainian provocations." 
 
Sueddeutsche Zeitung judged: "The issue is not whether Ukraine must 
pay 175, 250 or 400 dollars for Russian gas.  The core of the 
conflict is the international control of the Russian-Ukrainian flow 
of gas to the West.  The latest developments are only evidence of 
the enormous damage and distrust both Russia and Ukraine are now 
inflicting on others.  It is very difficult to judge who is right 
and who is wrong but both sides have not done themselves a favor 
with this.  The EU must now feel confirmed in its efforts to reduce 
its dependency on Russian gas, and the EU must wonder how reliable 
Ukraine still is as a transit state." 
 
Tagesspiegel argued: "Ukraine is now exploiting its authority over 
important transit pipelines to negotiate favorable conditions for 
its own gas supplies and for a clear increase in transit charges. 
But by doing so, Ukraine is doing exactly what Russia is accusing it 
of: It is taking its neighbors, who are dependent on gas, hostage, 
thus forfeiting its reputation as a reliable partner." 
 
Die Welt opined: "After this gas dispute, nothing will remain the 
same in EU-Russian relations as it was before.  Despite the 
co-responsibility of Ukraine, it is inexcusable that Russia is now 
taking entire national economies hostage.  The EU must finally act 
towards Gazprom with the degree of self-confidence which corresponds 
to its position as most important customer.  The EU must now create 
a situation in which Russia is more dependent on European money than 
Europe is on Russian gas." 
 
Financial Times Deutschland editorialized: "The Russian-Ukrainian 
fuss is now taking on grotesque dimensions, but the really worrying 
thing is that neither Russia nor Ukraine have shown any willingness 
to illuminate the obscurity that surrounds the gas supply question. 
The Europeans will gain considerable influence on the transit across 
Ukraine only if they take part in it.  Now it is coming back to 
haunt them that they no longer pursued efforts for a joint pipeline 
consortium.  Instead, German companies together with Gazprom backed 
the project of an overpriced gas pipeline across the Baltic Sea in 
which Russia has the control.  It is time to talk about an 
internationalization of the Ukrainian transit pipeline." 
 
Frankfurter Allgemeine Zeitung is of the opinion that "Ukraine's 
leading politicians held back their accusations for more than two 
weeks. This was obviously not an expression of the basic mood in the 
country but a consequence of the orthodox Christmas celebrations. 
After a good rest, opposition leader Yanukovich now announced the 
next escalation step between Moscow and Kiev by revealing his plan 
to oust the Timochenko government and President Yushshenko.  The 
Kremlin should be delighted at this.  Russian Premier Putin could 
hardly better illustrate to the West the consequences of a 
democratic revolution." 
 
¶4.   Secretary-designate Clinton Hearing 
 
Many German media reported on Senator Clinton's Senate hearing, but 
do not carry editorials.  ZDF-TV's Heute newscast noted this 
morning: "Secretary of State-designate Clinton said during a Senate 
hearing that she wants to renew the leadership role of her country. 
Clinton told the Foreign Relations Committee that international 
cooperation must be strengthened.  Tagesspiegel also headlined 
"Clinton wants to renew U.S. leadership role in the world." 
 
Frankfurter Allgemeine's intro stated: "Secretary of State-designate 
Clinton's return to the Senate was a moment of triumph....  American 
diplomacy under her leadership will strive for nothing less than an 
epochal change after eight years of Republican rule under President 
George W. Bush....  The new chairman of the committee, Kerry, and 
Secretary-designate Clinton highlighted that the fight for climate 
protection will be a priority of the future U.S. foreign and 
security policy." 
 
In a brief report, S|ddeutsche headlined on the hearing that Clinton 
prefers "diplomacy over the army," and adds: "The future U.S. 
Secretary of State Clinton renounced its country's unilateral 
diplomacy....  Clinton said she believes in the concept of smart 
power; diplomacy will always have priority over military solutions." 
 
Die Welt mentioned that "Clinton sharply warned Moscow" over the gas 
dispute, quoting her as saying that Russia's gas policy is "a 
significant security problem."  She added that the State Department 
will have an energy coordinator.  The paper stated: "She said that, 
given the seriousness of the situation, one needs a new framework to 
discuss energy security with the Europeans."  Die Welt commented 
that "Her casual but deliberate reference on NATO Treaty's article 
five was a statement of tremendous significance." 
 
FT Deutschland highlighted that "Clinton starts with old friends," 
by "falling back on her husband's staff." 
 
¶5.   EU Monetary Union 
 
Handelsblatt claimed: "The Monetary Union is faced with a conflict 
between the European Central Bank (ECB) and the governments that it 
has never experienced before.  The looming conflict between the ECB 
and politics will, however, be much more precarious.  Since the ECB 
determines the interest rate policy, it can make the state dance to 
its tune.  If the ECB wages an unrelenting battle against inflation, 
the entire euro zone will suffer from the conflict between monetary 
and finance policies.  That is why the European Commission and the 
member states must now see to it that such a conflict can be 
avoided.  Instead of closing their eyes and hoping for the best, all 
member states should now agree on how to reduce growing budget 
deficits to an acceptable degree.  Only if the governments are 
willing to do this, will the ECB be willing to accept a short detour 
from the path of virtue and do without threatening gestures." 
 
According to Financial Times Deutschland, "the euro is binding 
countries to each other that differ in their competitiveness.  But 
with the financial crisis, the members of the Monetary Union are now 
dangerously drifting apart.  One reason for the widening gap is that 
clear exchange rates between countries with different productivity 
patterns have changed the relative competitiveness.  While Germany 
has gained a relative competitive advantage of ten percent since 
1999, countries such as Italy have lost 40 percent as evidenced by 
OECD figures on unit labor costs.  During the first ten euro years, 
the positive effects of the relatively low interest rates outdid the 
negative influence of a disrupted competitiveness.  But in a 
recession, it will become much more difficult to gloss over cracks. 
If the differences in interest rates of government bonds increase to 
the level they had in 1999, speculation could arise that countries 
could suspend their membership [in the monetary union].  ECB head 
Trichet is rejecting such views as 'pipe dreams,' but leading 
monetary experts said a few months ago that such a development 
cannot be ruled out.  2008 was a difficult year for the monetary 
union but the greatest challenges could still come in 2009." 
 
 
KOENIG